Local councils have asked the government to give them new powers to tax large supermarkets under a system similar to that already in place in Scotland and Northern Ireland.

A group of 20 local councils have backed what has been dubbed a "Tesco tax" in order to increase revenues which they say would be invested in the local community.

Derby city council has called for the right to impose a levy on large supermarkets, which it says could earn the local authority an estimated £2m a year.

The BBC reports that anorther 19 local authorities are in favour of the tax.

The council made the proposal based on the provisions of the Sustainable Communities Act, which allows communities and councils to suggest solutions to local problems. It has led to claims that food prices would be forced up as a result.

In its submission, the council said 95% of money spent in large supermarkets leaves the local economy for good, compared with 50% from local independent retailers. The new tax would ensure that more money recirculates locally, it said.

The council leader, Ranjit Banwait, said the local authority was going through "the worst cuts in history" and the additional money could be used to improve local parks that had fallen in popularity.

Under the proposal, large retail outlets with a rateable value in excess of £500,000 would have to pay an extra business levy of up to 8.5%.

Similar schemes already exist in Northern Ireland and Scotland. If government agrees to Derby's proposal, it would apply to all local authorities, not just those that have backed the idea.

In a statement to the BBC, the Department for Communities and Local Government (DCLG) said the idea had already been ruled out in a past round of proposals under the Sustainable Communities Act.

"There are much better ways to support small shops," it said.

The former Iceland and Wickes boss Bill Grimsey called in his recent review of high streets for a one-off tax on major retail chains and leisure groups to fund regeneration.

He said council's bid should not be an annual levy.

"If it's used simply to plug council budget shortfalls, it won't be fair and it'll be anti-business. This has to be about the high street, not clobbering big business."

A spokesperson for Tesco declined to comment, and the British Retail Consortium said it would comment on Monday.